December 18, 2007, 3:36 PM — No one is calling 2007 a banner year for the technology industry in the U.S.
Congress.
Congress passed a handful of bills on many tech vendor and trade group wish
lists, but in several cases, they represented partial victories.
"This Congress so far has a record of neglect on technology issues,"
said Representative Bob Goodlatte, a Virginia Republican, whose party lost the
majority in Congress in the November 2006 elections.
Goodlatte isn't an impartial observer, but members of the tech community also
acknowledge that Congress has been slow to act on tech issues this year. Still,
not everyone was expecting great things from a Congress that had to reorganize
after the change in party control.
It's too early to judge this session of Congress, which continues through 2008,
said Kevin Richards, federal government relations manager at cybersecurity vendor
Symantec. "I think we have a lot of interest [from lawmakers], and this
has the potential to be a tech-friendly Congress," Richards said.
Members of the tech community point to some success in Congress this year:
-- Congress passed the America Creating Opportunities to Meaningfully Promote
Excellence in Technology, Education, and Science Act, which became law in August.
The America
Competes Act allocated US$43.3 billion for research and math- and science-education
programs.
-- Congress approved a free-trade agreement with Peru in December, the only
such agreement approved this year. Some labor and environmental groups opposed
some free-trade agreements, but the pacts are "imperative" for tech
vendors, said Sage Chandler, senior director of international trade for the
Consumer Electronics Association.
The CEA, which launched a campaign against "protectionism" in October,
said every trade agreement is important to its members. Upcoming free-trade
agreements coming before Congress include Columbia, Panama and South Korea.
A handful of CEA members are already doing business in Peru or would like to
and between 2000 and 2006 U.S. consumer-electronics exports to Peru increased
by 12 percent, Chandler said.
"Without the ability to sell into foreign markets and get components from
foreign markets, our companies aren't going to be able to employ Americans,"
she said.
Some successes the tech community can point to, however, were partial victories:
-- Congress, in late October, passed a seven-year extension to a moratorium
on access taxes and other taxes unique to the Internet. But many tech groups
and lawmakers had pushed for a permanent tax ban, arguing that it was needed
to foster Internet and broadband growth.
Opponents of a permanent ban successfully argued that it would remove a check
on Internet service providers attempting to include other services, such as
VoIP (voice over Internet Protocol), in the tax ban. In addition, some lawmakers
argued that a permanent ban could cripple the ability to pay for services.
But some lawmakers argued Congress should've gone farther. The House of Representatives,
which in the past has approved permanent extensions, this year passed a four-year
extension and "had to have the Senate show them the way to a better seven-year
extension," Goodlatte said. The "ultimate goal" should be a permanent
tax moratorium, he said.
-- The Senate in December passed a one-year extension to a research and development
tax credit for U.S. companies. The Temporary
Tax Relief Act, which the House approved Nov. 9, extends the tax credit,
which covers 20 percent of qualified R&D spending. But many tech groups
have called on Congress to permanently extend the R&D tax credit, which
has been extended a dozen times since 1981.
Supporters of an expanded tax credit argue that the U.S. has fallen behind
other nations in its R&D support. Once the most generous with R&D tax
breaks, the U.S. by 2004 fell to 17th out of the 30 nations of the Organisation
for Economic Co-operation and Development.
But the tax break comes with a price tag of about $7 billion a year, and Congress
has been reluctant to extend the program long term. Some government watchdog
groups have called the R&D tax credit corporate welfare.
